Wyoming named best run state for second year in a row

How well run are America’s 50 states? The answer depends a lot on where you live.

For the second year, 24/7 Wall St. has reviewed data on financial health, standard of living and government services by state to determine how well each is managed. Based on this data, 24/7 Wall St. ranked the 50 from best to worst. The best-run is Wyoming. The worst-run is California.

Comparing the 50 states can be a challenge because they are so different. Some states have abundant natural resources while others rely on service or innovation. State populations also can be more rural or more urban. Some had booming industries that are waning or that have disappeared altogether. Border states with large immigrant communities have populations that are growing rapidly. Many states in the Northeast are not growing at all. All of these factors affect the finances and the living conditions in in each.

Despite these differences, states can do a great deal to control their fate. Well-run states have a great deal in common with well-run corporations. Books are kept balanced. Investment is prudent. Debt is sustainable. Innovation is prized. Workers are well-chosen and well-trained. Executives, including elected and appointed officials, are retained based on merit and not politics.

To determine how well — or how poorly — a state is run, 24/7 Wall St. weighed each state’s financial health based on factors including credit score and debt. We also evaluated how a state uses its resources to provide its residents with high living standards, reviewing dimensions such as health insurance, employment rate, low crime and a good education. We considered hundreds of data sets and chose what we considered to be the 10 most important measurements of financial and government management.

This year, as a new component of our analysis, 24/7 Wall St. obtained additional budget data for each state. Examining the state’s revenue and expenditures, and what each government opted to spend money on, allowed us to determine if a state overspent limited resources, failed to devote funds to an urgent need of its citizens or spent a great deal of money but with poor results. While we did not use expenditures or revenue in our ranking, these numbers reflect how a state is managed. Together with other budget data, living standards and government services, it provided a complete picture of the management of each state. A fuller accounting of our methodology can be found
here.

The 24/7 Wall St. Best and Worst Run States is meant to be an analysis that will focus the debate about state management and financial operations. The analysis should also serve to empower and inform citizens who want who want to better understand the impact government decisions have on each state.

The best run states

1. Wyoming

State debt per capita: $2,452 (18th lowest)

Residents without health insurance: 14.9 percent (21st highest)

Residents below poverty line: 10.3 percent (7th lowest)

Unemployment: 5.8 percent (6th lowest)

Wyoming comes in first place in 24/7 Wall St.’s Best Run States for the second year in a row. The state has high marks in many categories including high school graduation rate. A whopping 92.3 percent of state residents age 25 or older have at least a high school diploma — the highest rate in the country. The state also has the fourth lowest rate of violent crimes and the sixth lowest unemployment rate. Wyoming has the smallest population of any state in the country.

2. Nebraska

State debt per capita: $1,407 (4th lowest)

Residents without health insurance: 11.5 percent (14th lowest)

Residents below poverty line: 11.9 percent (tied for 14th lowest)

Unemployment: 4.2 percent (2nd lowest)

The state of Nebraska had the 21st lowest revenue per capita in the country in 2009 yet managed to spend more per capita that year than all but seven states. The state has the fourth lowest debt per capita, and it is one of 13 states with a perfect AAA credit rating. Besides being financially sound, Nebraska also has an unemployment rate of 4.2 percent, the second lowest rate in the country. The state also has relatively low poverty, high graduation rates and the seventh lowest rate of foreclosures last month.

3. North Dakota

State debt per capita: $2,721 (20th lowest)

Residents without health insurance: 9.8 percent (9th lowest)

Residents below poverty line: 12.3 percent (17th lowest)

Unemployment: 3.5 percent (the lowest)

One of the best measures of North Dakota’s success is its unemployment rate of 3.5 percent — the lowest in the country and one that has n0t been above 5 percent in over 20 years. While the state has relied on a stable agriculture sector to keep unemployment low, the booming oil industry has created a $1 billion surplus in the past three years. From 2009 to 2011 Montana was the only other state to report a surplus, according to the Center on Budget and Policy Priorities.